Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you conserve the IRS cash because its employees do not need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about safety? And can digital filing really provide you access to all of the forms that you might need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there’s a digital backup of your tax records. If something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. The types do the math for you and provide basic guidance. You can simply do your federal return with these forms.
- Use an online tax preparation tax or service applications: Tax prep software and online filing services are options. These choices are an easy way to finish and e-file your forms. Some applications suppliers charge for their programs, Some are free. The program asks you simple questions about your life and finances to steer you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on income, and some providers appeal to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with all these data breaches. But experts agree that this isn’t an issue which should deter you from e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is very important to employ a trusted service to assist you record your taxes. Chow advises not to e-file on a computer or use an internet connection that is not confidential.
For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure that you use tax preparation software from a dependable source, so you may make certain the information you supply to transmit to the IRS is going to be kept secure.